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NEW YORK, April 4, Dow Jones

April 05 2013, 07:57AM

Gold futures ended slightly lower on Thursday, paring earlier losses as the US dollar weakened and helped cushion gold's declines.

The most actively traded contract, for June delivery, settled down $US1.10, or 0.1 per cent, at $1,552.40 a troy ounce on the Comex division of the New York Mercantile Exchange.

This was a fresh nine-month settlement low for the contract.

The US dollar eased against a basket of international currencies through the afternoon, skidding into negative territory. The ICE Dollar Index was recently trading down 0.1 per cent at 82.673.

Gold futures are traded in US dollars and become cheaper for investors who use other currencies when the dollar weakens. This tends to lure foreign investors into the gold market as buyers.

Gold prices must climb above $US1,615 a troy ounce, their 50-day moving average, before traders who follow technical indicators will be convinced the metal is on track to recovery, said Ralph Preston, market analyst with Heritage West Financial.

"We just don't know if this is just a bounce, or if this is where physical buying comes back in," Mr. Preston said.

Earlier in the day, gold prices had sank to their lowest level in 10 months, as the dollar climbed against the yen after the Bank of Japan said it would step up its quantitative-easing efforts.

"Gold is still very much tied in to the dollar, and because of all the other QE's out of Europe and Japan, the US dollar is picking up strength and with the dollar higher, gold is not doing that great," said Yu-Dee Chang, chief trader with ACE Investment Strategists, LLC.

Investor attention now turns to the US monthly employment data for March, due Friday at 8.30 am EDT.

The report is widely considered a barometer of US economic health and a harbinger of shifts in the Federal Reserve's monetary policy.

Gold prices had soared to record highs on the back of the Fed's monetary-easing efforts, which had triggered fears of higher inflation. More recently, however, investors have feared that improved labour-market readings would prompt the central bank to pull supportive measures earlier than previously thought in a more that would weigh on gold.

Settlements (ranges include open-outcry and electronic trading): London PM Gold Fix: $1,546.50; previous PM $1,574.75 Jun gold $1,552.40, down $1.10; Range $1,539.40-$1,559.30 May silver $26.767, down 3.0 cents; Range $26.575-$27.015 Jul platinum $1,517.80, down $24.10; Range $1,511.10-$1,540.30 Jun palladium $725.45, down $30.00; Range $723.00-$753.50